Smartphone video games beat handheld consoles on revenues

Although the result of this struggle was a bit of a foregone conclusion, we now have data in front of us to prove that today revenues ofsmartphone video games top that of traditional portable consoles during 2013. A report done by IDC and App Annie reveals that Android has quadrupled its revenues, while iOS is still in front with a good lead.

Android and iOS ahead of PSVita and Nintendo 3DS

The growth of Android is the main takeaway from the study. With 1.5 million activations per day, its user base has increased some 13%, with the other mobile platforms having lost ground. Although the exact numbers haven’t been released, in May 2013 there were apparently some 900 million activations of Android devices, while in September of the same year, Apple announced that it had already reached the figure of 700 million for number of iOS devices sold.

The portable consoles now on the market are already way behind the number of mobile devices sold: Nintendo 3DS has a fleet of 43 million consoles, while PSVita doesn’t top 8 million. Until recently when it came time to tally the revenue numbers there was no decisive difference between the platforms given the abysmal price difference between the apps and the traditional model. While a 3DS game might well top some €/$30 and hold out a long time at that price, the going rate for a mobile app is less than €/$1.

The mobile market keeps growing, but handheld only grows during certain seasons

iOS continues to win the game at the revenue level for a simple reason: its consumers are more likely to pay for an app in the first place. Android apps increasingly tend to turn to the freemium model to win new fans; that is, users download the app for free and fork out later to add extra features.

The quarterly result table makes this trend very clear. iOS and Android grow at a steady rate over time, while portable consoles move more along seasonal lines, with a marked spike in sales during the Christmas period, and then later dropping again until the next sales campaign.

The Free-to-Play business

We discover a curious moral to this story when we look at the rankings of the apps that have generated the highest revenues, since they are composed in their totality of Free-to-Play games, with Candy Crush Saga, Clash of Clans, and Puzzle & Dragons. With regards to consoles, the first party games for Nintendo 3DS occupy the top spots (the most expensive games for the platform that also usually don’t even offer discounts).

Such is the use and abuse of the freemium model that the European Commission is even planning to regulate the market to avoid fraud and scams in this type of app,since the “real” cost of their content is not clear and due to the ease with which you can make an in-game purchase by mistake.